1 Feb 2017

Under-investigation ex-Cera staffers stood down

5:42 pm on 1 February 2017

Three former Canterbury Earthquake Recovery Authority (Cera) employees under investigation over allegations they tried to use their positions for financial advantage have either stepped down, or been stood down, from their new government roles.

Murray Cleverley

Murray Cleverley Photo: South Canterbury District Health Board

Murray Cleverley, who was the general manager of investment strategy at Cera, has stood down as chairman of the CDHB and of the South Canterbury DHB.

The other two - named by Fairfax as former Cera investment facilitators Gerard Gallagher and Simon Nikoloff - have been stood down from their jobs at rebuild entity Ōtākaro Limited.

The Prime Minister's Department and the State Services Commission are investigating after accusations the three men used their public service positions to advance their private business interests.

The staffers tried to arrange property deals through their own company for a finder's fee.

The State Services commission today announced it had formed the view there were grounds for a wider investigation.

It would carry out a separate inquiry, which would cover not only cover the men's actions while they worked at Cera, but their actions in subsequent government roles.

Cleverley confident he acted properly

In a statement today, Mr Cleverley said: "I have made the decision that the right thing to do is to step aside from these [DHB] roles for a period of time to allow for a review of matters relating the the management of perceived and/or actual conflicts of interest."

He had told the Crown he would support and co-operate with the inquiry.

He was confident he carried out his Cera responsibilities "in a proper manner". He left the role two years ago.

Mr Cleverley would not comment on his employees at the time.

Ōtākaro Limited chief executive Albert Brantley said in a statement: "Ōtākaro Limited is taking this matter seriously and two employees have been stood down while the State Services Commission conducts its investigation."

Health Minister Jonathan Coleman said CDHB deputy chairman Sir Mark Solomon and South Canterbury DHB deputy chairman Ron Luxton would act as board chairs until the inquiry was complete.

Grounds for wider inquiry - State Services

Until today, the State Services Commission was supporting the inquiry by the Prime Minister's Department.

Today, it announced it would start its own because it believed there were grounds for a separate inquiry.

State Services Commissioner Peter Hughes said he would appoint a qualified investigator to lead its own inquiry. He had asked for an interim report by the end of February.

"These allegations are very concerning and if established would be a serious breach of the standards of integrity expected in the Public Service," he said.

"I am launching an investigation under the State Sector Act to establish what has happened here," he said.

"New Zealanders need to be able to have trust and confidence in Public Servants and the Public Service. These allegations raise questions that cannot be left unanswered," Mr Hughes said.

"The code of conduct for the State Services makes it clear that it is unacceptable for any state servant to use their role to advance private business interests or seek any sort of personal benefit," he said.

Allegations damaging for New Zealand

The Minister in charge of Christchurch's rebuild, Gerry Brownlee, said yesterday the allegations facing the men were damaging for New Zealand's reputation.

"It is undeniable that there was a company formed for a purpose by three people who were employed by Cera so that alone is enough to investigate the activity, because that activity would be unacceptable," Mr Brownlee said.

"I want to make really clear that we are not leaving any stone unturned."